oh92
Short

Breakout or Fake Out?

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
As many of you already know that BTCUSD             has broken out of it's short term trendline . Generally this is an amazing signal for reversal, however, I am not convinced yet.

False breakouts are one of the oldest tricks in the books. Market Makers use these to trick small fish into creating impulse positions, driving the price up or down and the volume up. The Market Makers, aka Whales, use this volume to their advantage, eventually driving the price in the opposite direction.

My reasoning:
  • Directly above the broken trendline is the .5 fib level which we are currently struggling to break through. This level, along with the .618 are very common areas to bounce off of to continue the current trend.
    Breaking past the .786 would be a very bullish move for BTC             and is something that is still very possible.
  • Not only are their major fib levels to watch out for, it appears that we are currently completing the 5th impulse wave. Meaning downward movement is likely to follow.
    Generally, based on BTC's history, the 5th wave is often the largest impulse wave; which means there is still a chance for BTC             move higher. So the golden V marked above (also the .618) is a potential place for BTC             to continue its downward movement.
  • IF you look at the RSI , that line is acting like a brick wall. BTC             has failed to push through it on multiple occasions, and large downward movements have followed immediately

Summary:
I'm not here to crush all of your BTC             dreams. There is still a solid chance BTC             will push through all these levels and we could see an ATH             in the future. However, based on my TA knowledge, I do not believe the odds are not in its favor.
I am not posting this saying whether to go long or short. This is more of a caution for all traders. That this break is not a guaranteed moon. Market Makers are a real thing, and they have more skills and tricks that any of us could imagine.

I wish you all the best of luck.

DISCLAIMER:
Please note I am only providing my own trading information for your benefit and insight to my trading techniques, you should do your own due diligence and not take this information as a trade signal.




Comment: This is an area to be cautious in.
Comment: The break upwards out of the wedge is a very bullish signal. which means we are likely in an upward channel instead.
However, there remains very strong divergence on the 4h which has me hesitating to place a long.
Not only that, we still remain in the limbo zone, which means a sudden swing could happen in either direction. Trade with caution.
Comment: As you can see with the lack of upward momentum, BTC appears to be weakening.
I am currently short, but i reconmend waiting for a clean break/close in the channel before entering. Target would be the .5 fib level. The possibility of this swinging up still remains.

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I don't agree much with your last opinion. Looking at the 4h chart I see the RSI just at 60 and the MACD signal significantly above so I believe that it is taking a small consolidation before another push towards 4500 or even 4600 in the next hours. From there it will probably do another small correction within the channel until it resumes again to go to 4700 which could be a big significant resistence.

I agree with you that we are in wave 5 but I see the top at around 6-7k before we start a "long term" correction.
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everyone so bullish right now mnakes me want to become a bear
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Looks and sounds plausible, bud. Keep up the fine work.
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Do you think that the whales are waiting for some kind news to make the move? It has been flat for a couple of days. Seems like a century in the crypto world. :-)
+2 Reply
Hi friend, please answer my newbier question... When we are in a downgrade moviment, its a good idea to take profit before, in other words, sell. What you do in this case? hold your BTC on wallet, sell to another ALTCoin like USDT or sell for fiat in some place? we appreciate you answer...
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oh92 monguilhot
@monguilhot, I prefer to keep my money in whatever is most stable during a downtrend. Which is usually USDT.
Most alt coins tend to follow BTCs general direction, however their price movements can be much more volatile.
Therefore it is always wise to take profit at the highest price possible, and then repurchase once upward price movement is confirmed.
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@oh92, thanks a lot for your answer... USDT, right, but looking for the YEAR chart of USDT https://www.tradingview.com/symbols/USDTBTC/, scares me a little bit... can see the downtrend moviment? Its not something that we can worry about?
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oh92 monguilhot
@monguilhot, yes. that is because over time BTC has been increasing over time. Making the dollar less and less valuable compared to it. However USDT remains fairly stable against USD itself. So if ever looking for a safe heaven while you figure out at position, I highly recommend it. Now could their be a better alt coin option? Definitely, but altcoins are even more unpredictable than BTC, so every situation could be different. One alt coin may be safe today but a disaster tomorrow.

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@oh92, Thanks for the answer, so you are using USDT because Poloniex doesn't support USD. Since I am using Kraken and GDAX, so I should use USD instead. right?

I heard about rumors about USDT has systematic risk because it is supported by bitfinex, which could be a big trouble if they moved the cash that supposed to support the value of USDT to somewhere else, and you can't withdraw USD from Tether.io right now.
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monguilhot TomAndrulis
@TomAndrulis, Hello friend... the question here is not to take profit... its just to hang the loses, in other words, dont loose more. The strategy is trade again USDT to BTC on the bullish time, not trade to USD. The problems with trade USD, in my point of view, is the taxes from brokers and the risk, to negotiate with FIAT. But im newbie, and Im here to lissen that im wrong :D
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